001All right. Good afternoon everyone. We'll call All right, we'll try that one more time. It is Tuesday, April 8th. We'll call our schoolboard work session to order. Um, present in the boardroom, our members Bellamy, Lessons, Jacobs, Higgins online, our members Hollowman, and Wilson. We'll note when member Donley joins us. We've called ourselves to order, conducted a roll call. Our next item on the agenda is healthc care discussion B1. Dr. Bryant, the floor is yours. Thank you, Mr. Chair. So, this has been an ongoing conversation with uh the board and the administration. So today is another milestone where uh we'll have the AERA group present findings on a market analysis on the ASD health plan. So um I'll hand it off to our chief of human resources, Marty Lang. Thank you, Dr. Bryant. Uh thank you
002members of the board. Good afternoon. Um yeah, this is a milestone. We are excited today to um have the board here a market analysis that was done by um the group. Uh I'll talk a little bit about some background and some of the uh work that we asked them to do as part of that analysis. But first I'd like to introduce uh Tyler Calfhammer uh Sheree Hendris um who are with the group. They'll be our primary presenters tonight. So I'll be handing it over to them here in a moment and they'll tell you a little bit more about their background and expertise. And then Ty Walty is here as well. She is the senior director of our benefits department for the district. So, um I'll just remind the board um that this uh we have
003four different health plans in ASD that we contribute to. Um three of those plans we make contributions on behalf of members into a health trust. And then the fourth plan is the ASD health plan and that is a self-funded self-managed plan um that serves about 1,500 of our employees and includes eight different um employee groups. So, uh, exempt employees, uh, our principles with APA, um, ACE and totem employees, our warehouse and maintenance folks, food service, kind of an interesting legacy retiree group, and then our nonpr represented folks who are affiliated with our charter schools. Um the question has come up um in my tenure uh in this position a number of times about whether or not um the district should remain as a self-funded plan for the ASD health plan. And so um we commissioned
004um this market analysis primarily to address that question whether or not um it's best for us to remain um self-funded or potentially move to a fully funded option. uh we asked them to look at our plan design and benchmark that against other peer groups uh in Alaska and across the nation and then also um to give us some information if we were to make a change at some point what the runout cost would be on our current plan um as we made that transition. Um I'll give you some additional um information uh just about the history of this plan. We switched over to a self funded plan for the ASD health plan in 2009. Um since that time we have worked with the alliance in uh insurance service group. They've served as our brokers and
005advised us on u plan design um and changes year-over-year. Uh Etna serves as our thirdparty administrator. So they manage all the claims um under this plan. Uh Voya is uh the carrier that provides our stop-loss insurance. And um you're probably familiar that in 2016 we partnered with Vera Whole Health to open up a nearsight clinic for employees under this plan. Um they've since sold out um that's now managed by a pre um we also have a health task force that helps. So TAI's uh department, the benefits department manages the self-funded plan on a day-to-day basis. Um we have a task force that is made up of two representatives from each of the bargaining groups that are represented under the health plan and we meet quarterly and they help advise on plan design changes and help
006us make some of the decisions around renewal um decisions each year. So like I said the question has come up a number of times you know whether or not um that is the best posture for us as a district. We want to make sure that our health plan is uh both cost-effective um but also providing good benefits for our employees. And so I think after 15 plus years being um in this posture, it is it is good to pause and do some analysis and and ask some of these questions. Um it's interesting as as I talk to my counterparts in other districts across the state. Um they're all asking the same question. Uh in fact, I was talking with Katie Parrot from um our office of management and budget. She was was at an Alasbo
007conference recently and um healthc care came up as a topic and it it she shared that all of the district that were part of fully funded plans were investigating whether or not they should go to a self-funded plan and those who were self-funded were investigating whether they should go fully funded. There's been a lot of volatility as you know in the health care space. Um a lot of people are trying to figure out how to contain costs associated with health care and still maintain those um those good benefits for employees. And so, um, we thought it was a good time to do some of that analysis as well. And it was also one of the recommendations that came out of the audit that the Council of Great City Schools did for our benefits function last
008year. And so, uh, we wanted to follow that recommendation. So, with that, um, hopefully that sets the table. I'm going to turn it over to, um, uh, the folks from ARA to present on their findings. And then between the four of us, um, we should be able to entertain any questions that you might have once they're done presenting. Thank you, Marty. Uh, so I'm Sheree Hendris. We'll just do a quick introductions of ourselves and sorry, I was trying to get this to um so anyhow, Sheree Hendris, sorry. Uh, I'm a lead consultant for national accounts working with the Lyer Group and I've been um working with clients for about 26 years. uh in this business um consulting background and we're happy to be here um today. So I'm going to turn it over to Tyler
009to do a quick intro as well. Tyler Cafmer with the Lair Group. I'm the executive director of underwriting analytics. I've been in the industry for one more year above Sheree at 27 years. I've split between uh half and half between uh carrier underwriting at Blues Plans and then also the other half being on the broker side and happy to be here. Great. Um, so Marty has already gone over um pretty much the scope of the project. Uh, so we can um go ahead and move past that and talk a bit about the um I'm right-handed. So can you just move that forward? Yeah, perfect. Um so today we are going to talk a bit about the current state of the plan which Marty also um chatted about but in our report we do have um
010you have the self-funded medical plans administered by Etna. You do offer uh the qualified high deductible health plans with either an HSA or an HA uh contribution for your members and uh a PO plan which is close to your um to to new enrollment. I'm sorry, was there a question? Oh, yes. So, qualified highdeductible health plan. Um, so, yep. And I do have a little slide here to go into a little bit um of detail on what the what I mean by a qualified high deductible health plan. Um, and a PO plan is just your it's a preferred provider network plan. Um, so that's what the PO is. Uh, thank you for pointing that out. Um, and then you do have some retirees on a PO plan as well. And then as Marty mentioned, you've
011got Vera whole health. And so that I do mention that here because that goes into some of the costs of what the the district is currently spending. And then you have your stop-loss coverage um covered by Voya. And that is really your individual excess risk. So, that's really there to pay for any claimant that hits uh $500,000 in claims in the one-year period. Any claims over that $500,000 is paid for through um through Voya under your stop-loss policy. So, what is a qualified highdeductible health plan or sometimes it's also referred to as a CDHP, a consumerdirected health plan. um that really is a plan that is it's it's specified by the federal government. It's a plan that is compatible with a health savings account, otherwise called an HSA. Um so you'll hear it both ways.
012Um and that's a a tool or a mechanism that you can save money um that's set up by the IRS and really needs to be paired with that qualified high deductible health plan. And what do we mean by a qualified highdeductible health plan? There are specific parameters within the benefit plan design that qualify that plan to be paired with that health savings account. Um, and that those are really set by the by the government and what you can offer. They put a minimum deductible out there that a member must have and um maximum out of pocket as well. So those are statutorial um statutoily set and then from there you have some ability to make some adjustments um and the deductible and the out- of-pocket maximum. So there is a bit of a difference uh
013on those plans on the um qualified high deductible health plans compared to a a general proide preferred provider um network plan. And that is if you are a single um person, you pay that single deductible. But if you have a family um you also need to meet your family deductible. There is no single person deductible in that family coverage. So that's one of the major differences in those uh qualified plans. You also all expense the member has to pay um all upfront costs until they hit that deductible amount as well. So there are just some differences there within the plan designs that um make up those plans. So now we're going to go into a bit about the claims experience. Um and in this report we do have claims experience. We did do a projection
014and then we took a look at the at the marketing and compared to um Premier Blue Cross Blue Shield of Alaska and what they where they provided us a proposal. So we have that comparison here for you today. So in looking at the claims experience, we had data through December of uh 2024. So we're looking here at a very high level snapshot of the experience. On the left hand side there, you can see the the plan year of 2023 through 2024 and then plan year to date 2024 through 2025, which is actually through December of 2024. um line item out the net paid claims, the fixed cost there, that's the cost of administration and um the stop-loss premium. Uh total net plan cost there and then comparing that to the total budget funding. And then
015the pharmacy rebates are um reduced reducing the net total net cost. Then you can see the net loss ratio is just simply the the remaining net cost versus the budget. Uh if you ran exactly at budget, that net loss ratio would be 100%. So, we're running uh better than budget and 93% in the prior full plan year and 92% uh contract year to date for the first uh six months of the plan year. So, showing a net uh gain or surplus of 2.575 million in the full plan year there and then just under 1.5 million uh contract year to date. So, we're getting a little bit more specific into the claims utilization as we go through this exhibit these exhibits. Uh we're breaking down the uh claims costs and the uh fixed costs by um
016plan design here. So the PO uh bucket there 430 uh average enrollment those are enrolled employees. The HSA plan or that qualified deduct qualified high deductible health plan at 743 enrolled and the HA plan at uh health reimbursement account uh plan at 262 and then the retirees at 8. So a grand total of 1443 total enrolled for the plan year on average, the current plan year. Um you can see the the fixed cost broken down by um each of those plans and then the claims administration, I'm sorry, the clinic administration and then the stop-loss reimbursement. Those are the claims and paid in excess of that $500,000 specific stop-loss level. And then the contributions at the bottom there and then total estimated ASD cost bolded at the bottom right there of 17.4 million. And then, excuse
017me, the following page here is getting even more specific with very small font. Apologize for that. But looking at it on a monthly basis now, uh tracking the uh lives covered, the fixed cost, the gross paid claims, the stop-loss claims, the net paid claims, total cost, and budget, and then showing a monthly uh surplus or deficit. I obviously bouncing around quite a bit in the prior year. um all but one year have been a surplus in the current year though. And then at the bottom here, we're also expressing those all those components broken down by each of the four plans as well. And the reason we dig into this because this helps us enable us enables us to put together a projection that where we're able to project the costs into the uh future year
018on a self-funded basis and then we're able to compare those costs to what the fully insured market came back with in terms of their proposals. Just a quick uh snapshot of the large claims history. So we're tracking claims over 100,000. So that those are members on the plan with claims in excess of $100,000 for the 2022 through 2023 plan year, the 23 through 24 plan year and then the contract year-to- date plan year as well as well. You can see that we had uh fairly stable uh large claimments above 100,000 um in terms of the number of lives, but the the dollars spiked significantly in 2023 2024. And really telling at the bottom the bottom line there the amount covered by stop-loss 872,000 in 2223 plan year and then it jumps up to 2.2 million
019in the following year and then back down to 86,000 but we're only halfway through the plan year. So, we would expect that to grow as the plan year matures. And getting more specific and I'll kind of uh speed through these next three slides. Getting more specific on the large claims details. Um these are the claimments of the plan uh with their total dollar amount for the plan year and then the amount above the uh specific stop-loss level. That's that ISL is another term for individual stop-loss level, which is another term for specific stop-loss level. It's your stop-loss insurance at the $500,000 level. Um, in short, we expect to see on average about 2% of your population accounting for about half of your claim spend. Uh, the following page is 2023 through 2024. You can see
020we uh had 141 claimants exceeding $50,000 for the plan year uh attributing for 60% of total paid claims there. And then six claims exceeded the is the specific stop-loss amount or accounted for specific stop-loss reimbursement of $2.2 million. And then finally, the 22 through 23 plan year. Uh fairly similar in terms of the number of lives, 145 claimants exceeding $50,000. Um but the the dollar amounts in that plan year were actually less than the 23 through 24 plan year. So in our analysis we also uh like to look at um seasonality of paid claims and if we see any uh jumps from one month to the next in any particular year. This is what this exhibit does. We're we're doing is we're expressing paid claims on a per employee per month basis or a pepm
021basis. You see they they do bounce around quite a bit in the plan years. But I what I'd like you to do is um fast forward down to the bottom there in terms of the average net paid claims. So those are the paid claims that the district actually paid after the stop-loss reimbursement. And going from 22 23 to 23 24 we saw a increase of 4%. Which is beating market trends. Market trends for fully insured in terms of um rating purposes are between 10 and 12%. And for self-funded uh uh uh employers, we're seeing those in the 8 to 10% range. So at 4%, we actually ended up better than the market in terms of a year-over-year change. And then you can see that in 2024, 2025, the contract year to date plan year, uh
022we're seeing a a downward trend, but again, it's immature data. And we would expect those claims to start trending up as the plan year uh progresses as well. In this exhibit, we're looking at the historical stop-loss and just how the the performance has been for your carrier. Um the right in the middle there, you can see the premium paid. So for the two and a half years that we're expressing here, we're uh premium paid in was 3.059 million. Um target loss ratio. So we're expecting the what the carrier expects to see as a loss ratio when we're um we take away the the admin expenses and if there's any pro profit component in the premiums uh true claims liability would be um reflected in that target loss ratio of 80%. So just under 2.5 million
023for the 2 and a half plan 2 and a half year uh period and then the total paid claims. So what the carrier was actually reimbured the district amounted to uh 3,166,336. So a loss ratio of 129.4% uh generating a deficit or a loss of 700 about $720,000 over the period. So that's the basis of our analysis and then we get into uh doing the actual projections because we're going to be able have to compare that back to the fully insured proposal at the end here. So just quickly through the projection uh our methods are is to utilize 24 months of claims experience. So you can see on the left hand side there the current and prior years we use full calendar years of 2023 and 2024. uh we um trend forward your paid claims
024experience and we're using 7.9% for medical and 11.4% for pharmacy. And then you can see the enrollment at the end of the plan year was 1477 enrolled. And if we look at the actual numbers in the boxes there, the top box is the current plan year. So this is what the actual current budget is. Uh expected claims at 2,000 just over $2,000. uh HRE claims factored in there, claims funding, and then we add in the fixed components which include the clinic administration, the admin, the plan administration, stop-loss premiums, and uh reduced by the pharmacy rebates that are uh reimbursed back to the district. So the total plan budget of about $2,131. Uh then we are compare that back to our projection. So, our projection at the bottom there, kind of the middle bottom is our
025expected pay claims at just over two or $2,70. Uh, putting in a rate stabilization percentage of 2%. I think of that as a uh basically a bit of a safety margin, if you will for claims fluctuation throughout the plan year. Um, HR claims added in claims funding total subtotal there. Then we add in the fixed costs. So, we're taking the fixed costs from the prior uh or the current plan year and then we're um increasing what we're seeing in terms of market trends. For administration, we increased at 3% stop-loss premium we increased at uh 12% and we're assuming 25% of total pharmacy claims as pharmacy rebates. That's a little bit conservative on that piece. We do see rebates range between 20 and 40% of total pharmacy claims. But at at the end of the day,
026when we put together the projected pay plan budget, we're at $224, $2,242, which is 5.2% above the current plan year. So that's basically our our baseline kind of drawing the line in the sand for what we're compare back to when we're looking at the fully insured numbers. The following page is an illustration of if the plan was actually increased to the 5.2% for the upcoming um July 1st effective date. On the left hand side are your total rates and then the employee cost. Uh then we're just increasing the rates by 5.2%. In this example or in this exhibit, we're holding the employee cost and then we're adding in the HSA H funding near the bottom there. And the total comes out to 5.1% which you may be asking yourself, why isn't that 5.2? It's because
027the HSA HR funding are are static between the two plan years. So, it actually drives down the the year-over-year rate increase a touch. So, the annual increase year-over-year, what that sums out to in real dollars, total dollars, is $1.965 million. That amounts to the 5.1%. So, before getting into the the fully insured uh proposal, just doing some benchmarking in terms of what other organizations like the school district are doing for funding. Uh we're using uh Kaiser Family Foundation uh survey as as our um basis here. Uh the red arrows are pointing to the relevant information. So you don't have to weed through this. Uh but looking at on the left hand side uh based off the the group size first. So looking at 1,00 to 5,000 employees, 81% of employers are self-funded. And then if
028we go over to the right hand side, now we're looking at state local government at 74% are self-funded. And that includes group sizes of any size. Could be 10 employees, could be 10,000 employees, 100,000 employees. And then finally to wrap up this section is just a a comparison of fully insured to self-funded and a easier to look at picture view. So um you're going to have claims on both sides and reserves on both sides. Administration expenses are going to be on both sides, but administration expenses are typically less on the self-funded side because the carrier is taking on um less risk or no risk. The stop-loss premiums are added to the uh fully insured size as pooling charges. It's just another term for stop-loss. Um those are mirrored on the self-funded side as stop-loss premiums.
029Uh there is a profit component on fully insured side and then of course state and federal taxes are added in as well on top there. And so in short, what we expect to see between fully insured and self-funded is about a 5 to 10% savings over a long-term period. And you'll see when we're looking at the savings on the selfunded side. Sorry, I should clarify that when we compare back to the fully insured proposal that we did receive and um you'll see that it actually is in alignment with that statement. Great. So, I'm going to go ahead and um now we're going to take a look at the marketing results. And I do have a summary slide um here that just shows um based on our projection for the that Tyler just walked through uh
030for the self-funded plan assuming a July one uh effective date. Uh the difference is um overall total premium increase is estimated at $4.2 million. if you were comparing that Etna um your Etna self-funded plan for July 1 compared to a Promera fully insured um July 1 effective date on those premiums. So it would cost uh the district an additional four projected $4.2 million or 10.2%. Um there are some differences uh between Etna and Promera. Of course, besides the name, uh there's a couple of the main differences or one of the main differences is the hospital systems. So Alaska Regional is your preferred hospital system with Promera would be Providence um would be the preferred hospital system. And um you'll see a note in here about uh just overall the medical claims analysis shows about a
0314% um difference uh discount difference between Etna and Promera. Promera being 4% lower on a discount um which means you pay fewer less in claims um yielding about a 6% claims cost savings. And what that means is part um much of that is made up because the Alaska regional chargemaster at the hospital is a higher number than Providence at uh the Providence facility. Uh that chargemaster uh you're starting at a lower base. So when you um mush all of that together, you're ending up with a 6% differential on those claims. um looking at facilities specifically um I would say Aly's experience with Promera is that overall 97% of the claims are paid in network uh with Promera. So um uh with other large employers here in the Anchorage area and then just network size the
032difference between Netna and Promera. Promera has about 96% of uh the providers are in network and Etna's uh network is at about 82%. So all of that goes into uh the claims analysis as well. Um and then on here down at the bottom is really just a summary of the fixed costs that go into uh the Promera proposal uh that they provided. And overall in the the funding is about 11% is for fixed costs. The rest of it is really um set there for claims funding um and then it's further broken out into administration is about 2 and a half% the pooling um which is the stop loss. Uh so the equivalent under your current plan is your Voya um policy or your individual's um stop-loss level uh in in that insurance. So the pooling
033is set at 6% and that that's the charge and the pooling level is 425,000. So any claim over 425,000 on the um fully insured proposal for Promera would be covered under this pooling or stop-loss coverage. um you would under a fully insured uh contract need to pay taxes and so the taxes are 2% um get paid and then you also pay into a high-risisk pool of a half a percent. So those are really those are built into the fixed cost within the proposal that Promera provided. So is that are those let's see the taxes the high-risisk tool is that this included in this 4.2 million up top. Yes, that's correct. And so in the next slide is really showing you the rates um are our projected rates assuming uh the 5.2% 2% increase to the
034current rates for ETNA. So that's in there in the middle or on the on the left hand side on those rates for the employee employee and employer cost shares. And um compared to the Premier proposal and you can see they're kind of um in the middle the 10.2% um increase and then down at the bottom that annual increase of four 4,155,000. So that is the difference between taking the um the projection that we did compared to the the premier proposal fully insured and at the top just for um we have lots of acronyms um ASO is administrative services only uh that's what that means that's a self-funded uh that's another term for self-funded um contract Um taking a look at the plan designs, the plan designs are basically equivalent between Promera and Etna. So the
035the main differences um in those is really the hospital systems. Uh the provider network is a little bit different um with a little bit broader network um with Promera, but there could also be some differences in the physicians that are participating between those two networks and um but overall the plan designs are are equivalent. Did you want to talk through this? So when an employer is considering a move from self-funding to fully insured, uh there's one major important aspect of that move that of that decision and that is uh what we call runout liability. And as you're fully or sorry, as you're self-insured, uh when you terminate that contract, you as the employer are responsible for all claims incurred up to that termination date and then paid after the termination date. And so that that
036bucket of money is what we call runout. And we're projecting the runout to be uh based off of your current runout patterns that we see within the claims utilization about $3.097 million that would need to be factored into any decision that you'd make by looking at uh self-insured versus fully insured. Um another aspect of this and so as noted in point two there, EDNA will process runout claims for one year. And then also another important note is that your current stop-loss contract does not include terminal liability. And what that means is that you do not have coverage or um there's a gap not gap but there's not coverage for runout. So an extreme example if you had a member that had uh claims incurred at the end of the plan year in the last month
037of say $5 million and then paid after the plan year, those would not be covered under the stop-loss contract in its current state. Um, so you'd be on the hook for that entire amount. I know that's a very extreme example, but our true um, projection of the runout liability there is just under the $3.1 million. This is the basis of the um analysis that we did to get to the $3.1 million for the runout liability of the IB IBNR estimate incurred but not reported is the acronym um for same term as we interchangeable with runout. Yeah. So, are there any question? Should should we pause for questions? I know we went through a lot of stuff and um talked a lot of acronyms and a lot of numbers. So, are there any questions? So, we'll
038go to member Higgins first. Yeah. Got a got a got a few. Uh first of all, when we talk about, you know, uh stop gap or or not and and whether it's fully insured or or not, we're talking about amount, whether it's a half a million dollars or whether it would be $100,000 or where we break in that, right? So, that's usually a factor that most employers look at and they get feedback from the insurance company and from the broker and say, "This is where it should be." I don't see any comment here about the $500,000 amount. And to me, that's a significant factor. you got any comments in regards to that? And I've done this with a lot of employers as you probably know uh within it. So it's you know with and I've
039been part of leisure team five hospitals and I've you know private and public and international HR. So I'm just it's just surprising to me see a $500,000 uh single stop gap and no collective stop gap. that's just out there a little bit based off our benchmarking in terms of employer size. And that's important to note that it's based off of just employer size. The 500,000 does feel appropriate. Um but there's a couple of factors that we're not considering there. And those are risk tolerance, right? Because you are paying in a premium for that that insurance. So as a district, you're you're um taking on the claims liability of up to $500,000 per member. in exchange for that, you're paying a lesser premium for that higher level in terms of stop-loss insurance. So, what we do
040with our clients on an annual basis, we're we do a a win- loss analysis or a deep dive into the actual stop-loss level and the premium and just advise on what's best for the uh for our clients each year. And so, how we do that is we look at historical uh large claim um experience. And so, I'll give you a simple example. If we had a client that had uh no claims in excess of $300,000 um in the past 12 months or the past 24 months, then we would um the the analysis would point towards purchasing a higher stop-loss level because they just simply don't have that liability. So reap the reward of a lower premium in exchange for taking on higher claims liability that historically does not exist. So those are some comments and
041hopefully I address some of your question there. When we look at the issue, you picked two insurance companies to make a comparison. How many different group health insurance out there would bid if we went out for bid and open it up to everybody? How many different uh medical pro uh insurance groups would be potentially bidding on this? It's a lot more than just two right here in Alaska. Yeah, I know. Um yeah. Um, so there's Moda, there's Etna, and there's Promera. That's your fully insured market here in in uh Anchorage. So, okay. I've had I'm just surprised with that. Yeah, that you know, and within that, I look at this and I also look at the administration from an insurance company. I've had problems with them in the past. I remember one that renewal date
042was October 1 and starting at August they were sending all the stuff back to the employee saying we need to verify your home address before we can process it and they sent it to their home address. Uh and what they were doing is they had a maximum gap maximum stop gap you know limit and then they would have to start paying and it was a way of deferring it till the next year. Uh so I know insurance companies will do a lot analyzing the type of uh insurance claims they get in and they compare that and they're motivated somewhat. This one doesn't appear to be motivated for processing claims uh in regards to being a partner and that's that surprises me a little bit. Um how much money do you spend on processing claims and
043reviewing them and trying to assess things when you have a blank check and you're just processing them off? And so that's a concern and I just wanted to see what response you have to that. I didn't want to make it easy. I used to be licensed in life and healthies, you So, I mean, I know a little bit about this stuff and I've been involved with it on the employer side a great deal and I know how the insurance companies sometimes really scrutinize this and and not and that stop gap thing motivates them and they process things a lot more closely than they would if it wasn't. I I I had gaspit by tra surgeries which is pretty expensive and they would write back and say uh you know this is experimental and then it
044would be challenged they would win and the next person who did it they said it was experimental so it really is deny delay and defend uh with some of these insurance companies and it does exist that way understand we don't want it to be unreasonable but I don't see here the process here that includes the insurance company um uh being motivated to be able to do the kind review at a half a million dollars and and the processing claims uh in trying to do it or recommending changes or what they should include and not include. There just isn't something there to do that. Um so one thought that I have on that Pat is um when you have Etna as your claims administrator and you have Voya as your stop-loss carrier. So they don't have
045a competing I mean your stop-loss carrier is the one that's going to pay those large claims over 500,000. Etna is processing those and they're going to process them um as your as your you know they don't have a skin in the game to slow down a claim for oh we don't want to pay that claim in under this policy. So that's one comment that I would make on that. Tyler, did you have Yeah, I I'd also add the slide that I have up here right now in terms of the the runout liability estimate um what we're looking at is just north of one month of um uh average monthly claims and that's very low in terms of time of processing. Our time of processing, we we average about 1.5 to 1.8 months of paid claims
046and that's just the the lag in time between the time a claim is incurred versus time that is paid. And so I would just comment that the the speed at which they're paying the claims is actually faster than market. One of the things I've heard from different brokers has to do with the frequency of going out for bid. And if you go out too frequently, you really weigh yourself down. The biders are going to be impacted. And if you don't go out frequently enough, you're not going to get the most competitive bid for the processing and the cost, and you're not going to have a savings. This thing's been around forever. Um, and so there hasn't been any sort of process for going out for bid and inviting anyone in for that type of bid.
047Do you have a recommendation on regards to how frequently you go out for bid? Because when I deal with other brokers, and I've dealt with a lot, um, you know, generally it comes back, you don't want to do it more than, you know, once every three years. You definitely don't want to do it every year, but once every three years is what they generally recommend. This thing has been here forever. When 2008 I first got on the board, we was fully intruded and there was no stop gap and it was just I saw that as a total waste because I saw businesses with 50 employees during the stop gap because there was savings to be made but that was never a half a million dollar type factor or or you know top on it. It's
048it's a tremendous cost and we're not Exon or any large corporation where we're just not worried about the dollars. We we're stretched. So I guess I'm interested in the frequency of going out for bids as well and what your experience is and recommendations that brokers do because my experience with brokers is at least every three years. Yes. So I would um I would say three every 3 to 5 years. It really depends on what piece. So stop loss I would say that should go out a little maybe a little more frequently than maybe your administrator that's just administrating those claims. If they're if they're doing their job properly, there's not any issues. that is a bigger it can be more difficult to move um your administrator than say your stop-loss maybe your pharmacy uh your
049life insurance those sorts of policies those can be done more easily than um moving the administration but I would say every 3 to 5 years and again depending on which line of coverage you're talking about or which piece member Higgins thank you for your questions we're gonna we're going to pivot to a couple other members who might have questions and I'll jump in really quick to ask a couple maybe rapid fire basic questions. Um you mentioned that we've got three providers here in Alaska, one of them being Moda. Um the analysis that was used um chose Promera is what was the methodology behind why Premier versus Moda and do we think that findings would have been different the comparison would be different? Um, Premier has the larger network. Uh, although MOA is closing in on,
050uh, they are building out their network. Um, on the, you know, just MODA is, you know, they're growing, um, and have had some recent successes in building out that network really more just this year. So, from a network, the stronger carrier in the market, um, I would say is Promera. They have about 80% of the business here in Alaska. Okay. was I had another follow-up question on your data that you used um for how many plans I think it's on slide 19 um funding uh for employer sponsor plans 81% are self-funded um in our range is this data national or is this Alaska centric this is national is there a breakdown or can we get a breakdown of Alaska centric data or is does this include any Alaska data Uh, that's a great question on
051whether the Kaiser family includes Alaska data. Uh, we can go back and bring back some further research on that. I'm not aware of a specific um benchmark that has Alaska specific. How many are self-funded? I just what I think I understand about our health insurance market, it's kind of its own thing. We're high it is nation per capita. um very few participating plans. Um and so that seems to be relevant. I offhand and maybe more of a question for Mr. Lang. Do we know if the state and MUN are self-funded? Yes, they both are. Both self. No, that's fine. And and I was just going to add that there's another section to the presentation on benchmarking um elements of our current plan that does include Alaska peer groups. And so it doesn't answer it for
052this broader question about employers who are in self-funded versus fully funded plans, but we will get down to that level of sort of uh comparative analysis specific to the Alaska group because I was very interested in that as well. Okay. And then last just quick question on the data that's been presented thus far. Um the 2% tax, who's it paid to and what is it called? Goes to the state. Okay. Do we have a tax in Alaska? It's it's a it's a tax on fully insured premium. There's a fully insured premium tax. All right. Just not a word we hear a ton up here. Okay. Other questions? Member lessons. Then we'll go to member Wil uh member Bellamy. Um I'm not really sure how to ask this, but I'll just say what about um dental
053and vision? How are those do those exist as separate um entities? Are they folded in in encompassed in some way? Can you talk about how we think about I don't know the whole person the whole employee and all of their needs? So member lessons um to answer your question with regards to the dental envision though at at one point in time the district did offer a medical dental envision as a full package at a composite rate. So one cost for the entire employee for all three pieces that has since been separated out and so the employee now has the flexibility to be able to elect only medical or only dental or only vision. We do have many employees who have opted to wave the medical coverage but still select dental or vision and so it
054is up to the employee what is the best fit for their specific family. have a follow-up member lessons I guess. So the followup um is that what whatever is you know sort of fleshed out here in the uh examples before us um you know if I am thinking about my growing children who require you know braces braces oh my god the yeah the braces and the glasses and all the things um then I would need as an employee to uh you know choose all three options I suppose there is no all-in-one in in what has been present presented before us. Okay. Thank you, Member Lessons. We'll go to Member Bellamy. Thank you, Miss Mr. Chair. I had a a couple of questions. Um, piggybacking on on member Lesson's question. Uh, as a former employee, because
055I was also married, my husband had some parts and I got a a different part, right? So, I wouldn't pick all the parts because but we had all the parts. So, just to put that out there. So can somebody remind me I mean I my understanding was is that you know the MUN and the state are self funded like we are why remind me Dr. Bryant or Mr. lang why why are we wanting to change or is that something I mean I'm just trying to understand because it seems for to me it looks like we're where we need to be but maybe I'm what am I missing in this whole discussion I would agree I think that this um analysis helps answer the question pretty definitively for me that we're in a pretty good posture
056that it would be um more expensive for us to move to a fully funded plan and there would be some expense to transition to that plan as well on top of that in the short term. Um I think the question goes back to what member Higgins was asking about as well. We just have not really paused to do this analysis for a long time. Um you know we've been in this posture for a little over 15 years. I would say for the first decade of the our self-insured experiment, things went very smoothly and there wasn't any reason really to question it. And then we've seen a lot more volatility in the last 5 years. You know, higher claims experience, um, larger renewals and we're not alone in that. We know we're not alone in that.
057And so I think this was just a sort of a prime opportunity for us to pause, ask the question, make sure, double check. No, it's excellent and then have the confidence going forward. Yeah, it's excellent information and and I'm not uh not appreciating it, but I just could not remember why we why we would want to go do something different. That's just me. My other question had to do with um have we gotten any feedback from employees about their experience other than the payout, how how the the how things are being paid? Have we asked the employees how things are going with them and how they are feeling about uh what we're doing, the services, the benefits we're providing? And if not, then I at some point I think uh at as we move forward,
058I would like to see something like that. Member Bellamy, I I can speak to some of your questions there. uh as a representative of the benefits department, one of the things that we do do during open enrollment is we hold ongoing labs and do make it a point to sit down with our employees and go over their health insurance. You know, I I I will be candid. The employees are always concerned about the cost of health insurance as they should be. You know, I I myself am on the health plan and that is a concern there. Our goal is to provide more education to our employees so that they understand the resources that are available to them and how to leverage those resources. Yes, we do have employees that share with us the the negative
059experiences that they have and we do everything we can to ensure that those are rectified going forward. But there are employees that do share the positive and the good things that do come out of the health plan we offer. one specifically our nearsight clinic with Vera that is a huge resource for our employees and was one of the driving factors for myself to come over to the district because it eliminates some of those unexpected costs of going to the emergency room or an urgent care and so informing our employees that that is an option that they can utilize and leverage without the concern of oh gosh my deductible or I don't have the funding they have given us a lot of positive experience in being able to utilize that type of resource or or disease
060management programs or virtual PT that does not cost the employee any additional amount on top of what they already pay for the monthly premium costs. And so we do get a lot of positive feedback that these are good options, but we continue to strive to educate our employees that these are there and how to use them. and they can contact your office if they have uh struggles or absolutely. Okay. And we also, if I could add to that quickly, um get good feedback through uh the health task force. So those two representatives from each of the bargaining groups are pretty good about going out uh to their employee groups, asking questions, getting feedback, bringing stories to us, and you know, um individual experiences. And so in the two and a half years that I've been
061part of those quarterly task force, I feel like I've got a pretty good sense through them of how folks are feeling about about the health plan, especially as we have to look at more difficult plan design changes to keep costs down. Great. Thank Thank you, member Bellamy. Just for our housekeeping, wanted to note that member Donley joined us all the way back at 408 and member Wilson transitioned to in person around 4:16. Uh President Holland, the floor is yours. Ah, yes. I was just going to say to member Bellamy through the chair, um I had asked for this and partly because it keeps coming up during bargaining uh as to what our costs are and it's it's so expensive. It's a major part of our budget. It had just been a long time since we
062actually had a a real look at it other than uh the former director of HR, you know, making off-hand remarks or generalized comparisons. This is to my knowledge the first time in a very long time we've actually looked at numbers and done a heads up comparison between options but that that's why we're looking at it today. President Hullman not seeing um any followup to that. Um I'm just going to ask interject a quick question and we'll go back to member Higgins. Um, what I think I understand about the the analysis here is it it doesn't look at maybe a a third option that may exist. Um, there's right now there's a piece of legislation which would allow school districts to opt into Alaska Care or the state's self-funded plan. It sounds like um the Alaska
063State Troopers opted into the Alaska State Employees Association Health Trust. Um, does this analysis in any way determine if pursuing that path is viable? Um, this analysis does not. Um, however, I did have some conversation with the ASCA. Um, and you need to be a member. So the they are another self-funded plan and uh the requirement in order to participate in their plan or to get any um have further discussion with them at all is that you need to join their union in order to be because it's it is a plan for their union members. So yeah, that was what I was told. Yeah, I think that's a little bit misguided um just because state troopers have their own public employee union that are not ASA members. But it is good to know the limitations
064of this analysis and I don't I more of a follow for Mr. Lang. I I don't know how we analyze that but I think that's probably the missing piece for me anyway. Um I mean the Anchorage Education Association is part of a a health trust and so what's what's missing I guess on the other unknown while this analysis is very helpful and I agree it's um pretty clearly delineates that we're on a a pretty solid track with those two options being outlined is there might be something else whether it be through legislative action or whether it be through other conversations and so that's the unknown. Member Higgins go to your other followup questions. Yeah, in regards to the number of insurance companies, I mean, I had a personal issue one time where we went out
065for bid, but we didn't include all the different insuranceances there and um came back with, you know, comparable cost and then when we included other insurance companies, we reduced the cost 17%. I guess I my interest is what from other brokers, Signar and United Healthcare would be two peop groups that could actually bid, but you didn't include those in that group. Is there some reason why you wouldn't include that for reaching out for bids? Because I'm looking for the most competitive bid. They're they're big groups. They're obviously um got a reputation themselves. But you said there's only three groups in in Anchorage, but those two groups, other brokers have told me would be out there as well. Is some reason why they're not included? So, Sigma and United Healthcare have fully have self-funded business here.
066Um I'm not sure that they do any um fully insured and this was specifically for fully insured um proposal and we were contracted to to get a a one um proposal on the fully insured market. Well, I hope that what we're looking at is stop gap measures for individual and collectively is what we may be looking at and that Sigma and United Healthcare would be two groups that would like to do that my understanding from other groups. So I would hope that if we go out for bid we make sure that we include and give everyone an opportunity here with it would be an important issue to me for for an ASO proposal. Yeah. I I don't want any anything to be excluded. The other question was we heard before with the tinsters up here
067from Michigan saying hey we'll give you our insurance and and the like. And I don't know if any of that's valid and that's something Morty might know better than I do. But that was an issue that came up uh that that was an option and we would have Michigan rates and we would have all the other stuff for group health insurance. Have are you familiar with what they were proposing or did you have a chance to even know be advised of that or consider that was that for me? Um I'm I'm throwing it out there anybody if there's anybody that wants to jump in. I don't care. That that is something that has come up at the bargaining table from our teamsters group. Um, and we had representatives from the Michigan Teamsters Trust come and
068present. Uh, when we were in negotiations, I believe it was with warehouse and maintenance. This most recent round had a lot opportunity to ask a lot of questions. Tai was there um as part of that. Um, there it's it's interesting. It would be a much more restrictive plan than our employees are used to currently. um they they their price point is is good, but it comes with some tradeoffs that way. They also have a very unique administrative design that does not align with the current way that we process things in terms of payments and whatnot. It's a weekly cycle. it would it would cause a lot of it would cause us to have to change a lot of internal processes and um in the end it was an issue that was dropped at the table
069from the other side. So we didn't explore it further than that. Okay. Yeah, I just I don't want to throw anything off the table when it's that much money involved is all all I'm suggesting. And I would hope that when some assessment's done, at least we make sure we look at all options and Sigma and United Healthcare are two examples that to me excluding them would possibly cost us a whole lot of money and that's what I don't want to do. Thank you. There are other questions from the board at this point. Okay, I'm not seeing any. I remember that there were a few more slides and we can't extend uh for another 15 minutes or so unless there's an objection from the board. So if we'd like to continue the presentation, if there's slides
070remaining, go ahead. Great. Thank you. Um so this page really is a is a summary page of the benchmarking that we did, the key findings. Um it's a little bit I'll just kind of orient you to what's on here and then I do have a slide that has uh some more details on it. Um but we did um do benchmarking and compared you to national all employers Alaska specific education and then employer size. So based on um employers of a thousand or more employees and um and then in each of those I put where you're better than benchmark uh those are your green you're at benchmark or worse than benchmark. So you can see when you compare yourself to national all employers, you're in there um you're better than benchmark on your deductible, your out-of-
071pocket maximum. Um where there's room is on the pharmacy co-pays and then you have um a better contribution on your HSA contribution. um Alaska specific your deductible um is uh better than the Alaska benchmark and where there's um where you were worse than the benchmark is on that out-of- pocket maximum and your pharmacy co-pays and then your HSA contribution was more generous um education employers this is across the United States you know a national benchmark again uh and of all employer sizes and uh you better than benchmark on your on the deductible where there was room um where or where you were worse than benchmark was on the out-of- pocket maximum and the pharmacy co-pays and then better than benchmark on your HSA contribution and then for employer size similar story. So go ahead and
072move on. Um and then really when we take a look at premiums, uh your premiums are much higher than the alast than um than benchmark and all tiers uh in the Alaska benchmark, but your cost shares uh your employees are paying way way lower than uh the benchmarks out there. And this chart really gives you uh the details on all of that. And um you can see have the numbers on here. Uh your plan design is there on the right hand side. Uh just so you can uh quickly reference the plan design that we're uh talking about. This is your consumerdirected or your qualified highdeductible health plan where the majority of your employees are enrolled. Um and you can see uh we have company that's ASD's um information down that column. And then the national
073peer group one is Alaska, peer group two is educational services and peer group three is employer size. So employers of a thousand or more um employees across the US. Um and where I would just point out there is the premiums. So the premiums in Alaska we all know much higher than across the United States. Um the national data does include Alaska in there as well. Um so your premium for employee only is $1,19 and you can see that's uh much higher than other single employees across the US. Um and then families, I'll just go down to the family just to make that easy. um your premium is uh $3,328 uh compared to the benchmarks of ranging between uh $1,800 and uh $2,800. So significantly higher. However, when we look at the um employee premium contributions,
074your contributions are very um generous. Uh your employees aren't paying as much as the as employees across the nation. And where I like to look at is on that percentage um down below where your employees are paying anywhere between five and 6% depending on which tier they're enrolled in. Um compared to the rest of the United States in each of those categories on the single employee around uh 12 or 13% of the premium is paid by the employee. uh for a single and then uh we'll just say about 30% on the family and for ASD you're at five and six%. So those were the key findings and the benchmarking. Um, I think that's, you know, a a nice story to at least tell your employees, um, that their contributions, uh, they have a a generous,
075um, or within benchmark plan design or above benchmark plan design with, um, very generous employee contributions. Okay. Are there other questions from the board? Member Higgins. Uh, just one, what's a what what are we looking at time frame? Last year we got a report then we were out of time to do anything with it before the renewal because we got July one with the thing and we have to do the So where are we at right now on timing and are we going to be doing anything this year Morty or we looking at missing that deadline again? So, we had to do some things concurrently, right? Because the um renewal deadline for if we were to stay with our current plan is at the end of March so that we can get everything programmed in
076for open enrollment in May. And so we we knew that this uh report was pending and had we um had any indication that we might be making a major change to a fully funded plan, you know, we would have sort of abandoned course on um on that renewal discussion. So currently we are poised to renew with our current option, but we have a um a timeline uh for going out to uh RFP for a new broker um early uh this summer in the fall. And then following the decision around um a broker, we would look at um probably doing a RFP for a third party administrator. next. Um because to your earlier point, those haven't been done in a while. And so what Tai and her team have done is build out essentially a 10-year
077timeline where every element of um the constellation of folks that you know of companies that comprise our self-funded plan that we contract with. In a 10-year period, we would always be doing an RFP for each of those elements within that 10-year time frame. And so some of them more frequently, some of them space farther apart, similar to what um Sheree was sharing in terms of those suggested timelines. And so yeah, we are moving ahead um uh with our renewal currently um unless you know the board directs us otherwise. And um we'll be looking at each of those elements um going forward. So, a question for um the administration. I guess I I'm interested in being told no in writing essentially by the employee health trusts that exist in Alaska that they wouldn't allow us to
078participate in their trust. Um before we make a decision on um an RFP, can those two things align? So, can we before we choose a proposal as part of the RFP process, um can we pursue communicating with the existing employee health trust that will um could potentially accept our employees in writing and ask to be given an audience to participate essentially. I think the would be very difficult on on the current timeline and disruptive potentially to employees to make a a major change like that in a really short time period. But I am very curious about exploring that question. So in anticipation of you asking that question, I had asked that in a in a meeting um with these folks last week and you know I don't know what it means um in terms of
079having to affiliate because we do have bargaining units that dual affiliate and whether or not that would be an option. And so that is something that I do intend and um to have Tai and I explore further. So just to follow up then what does that look like? Um because I I hate to keep asking the question but I also feel like I've been asking it for a while and I know this process has extended over a period of now I think more than a year. And so what does that exploration look like and and when can we know can we expect to know when followup will be complete by to perform a check on our side? for the question specifically with AESA. I I I guess I would I'm I'm wondering if you know
080in a hypothetical world is there um would could we explore anything like PHT? I mean could we move all employees to that that health trust in theory and what would that look like? Would it be a benefit to the district or not? Um I'm not indicating that that's my preference. And just really it's a a question mark in our data that I don't know the answer to and maybe there's a reasonable answer which